Defending Bayh-Dole Under Attack

On February 28, 2013, I spoke at the annual meeting of the Association of University Technology Managers (AUTM), which was held in San Antonio, Texas. I spoke there about what universities can do to fend off the challenges to Bayh-Dole. As crazy as it seems, there are those who are advocating a change to what has been described by The Economist as the most successful piece of domestic legislation since the end of World War II.

Prior to the enactment of Bayh-Dole in 1980, it was virtually impossible to license University technology. In fact, a grand total of zero… that is 0… drugs developed with university funding from the federal government had been commercialized. Now, the pharmaceutical industry is enormously involved with universities and university research and dozens upon dozens of drugs have been commercialized. University basic science is the very foundation of many of the most exciting drugs, which provide tremendous cures and life-saving treatments. So dialing back the clock to when government-funded research was locked up so tight that it didn’t do anyone any good is simply ridiculous.

Each year AUTM conducts a survey. The last survey data was released in December 2012 and related to FY 2011. The 2011 AUTM licensing survey was sent to 305 U.S. institutions. This included 234 universities, 65 research hospitals, 2 National Laboratories and four third-party investment firms. There were 186 responses, which corresponds to a 60% response rate. From these responses, we learned that, compared with FY 2010, there was a 3% increase in the total number of startups formed, and starts-ups remaining operational for more than a year increased 7%. From this sampling of 186 respondents, that corresponds to 671 new high-tech startup companies formed, with 3,927 startups still operational at the end of FY 2011. The number of licenses executed was also up 14% in FY 2011 compared with FY 2010.

Indeed, the truth is that universities play a critical role in the development of innovative technologies, the forming of start-up companies, and the creation of high-tech (and high-paying) jobs. Yet, continually there are calls from detractors who want to change the system. How can anyone want to change university licensing back to the way it was before Bayh-Dole was enacted in 1980? Turning back the clock to a time when university technologies and innovations were so cumbersome to license that they simply were not licensed is even too ridiculous for a thought experiment. Senator Birch Bayh (ret.) changed university licensing and the very face of innovation and basic scientific research.Those who want to change this objective success really need to have their heads examined! What is their agenda?

It seems that many of the detractors of university technology think that universities ought to be doing more and really don’t need commercial partners. If anyone ever tells you that, then you should back away slowly because you are talking to someone who simply doesn’t understand research, universities or technology transfer. Universities play a critical role, but that role is to do the highly speculative, potentially high-reward research that couldn’t be justified in the private sector because it is nearly completely fanciful.

Universities push the envelope of science, asking questions and probing in ways a for-profit entity never could. Not having to justify research dollars to shareholders gives scientists and researchers as universities tremendous latitude. That latitude will frequently turn into spectacular discoveries – but very early-stage discoveries that could be 5, 10 or more years away from ever being deployable to consumers. That means universities blaze the trail, but they simply don’t have the ability or resources to do that commercialization research necessary to go from university lab to start-up business to consumer.

Enter university start-ups. University start-ups (as well as other small businesses who license university technology) are so critical to the development of these exciting technologies. But if you have a licensing regime that makes it nearly impossible to obtain the rights, the entire system comes to a halt, which is exactly what happened before Bayh-Dole.

The numbers are clear, and so is the appropriate path. In the U.S., for better or for worse, our only industries are basic scientific research, innovation therefrom and intellectual property. If we are going to consciously destroy our only economic stronghold then what do any of us have to look forward to in terms of economic development or further game-changing technologies and innovations that make lives better…that make living possible in many cases?

This entry was posted
on Wednesday, March 13th, 2013 at 19:25 and is filed under bayh-dole, posts.
You can follow any responses to this entry through the RSS 2.0 feed.
You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply

You share in the PLI Practice Center community, so we just ask that you keep things civil.
Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at
anyone's sexual orientation or religion. If you can't be nice, we reserve the right to remove
your material and ban users who violate our Terms of Service.